'This has been one of the strongest and most resilient markets of our lifetimes': Ghabour

本站添加: 2026-05-27

[00:00:00]Markets are hitting record highs, but with interest rates and energy prices staying high, how long can it hold if the Middle East peace doesn't last? We have the Eddie Gabor, CEO of Key Advisors Wealth Management, here to break it all down for us. Good morning.

[00:00:14]Thanks so much for joining us.

[00:00:16]Good morning. Thanks for having me. So, this is interesting. Like this has been one of the most resilient markets in our lifetime. What's really behind these record highs that we've been seeing?

[00:00:26]You know, what's interesting is the real story is earnings. I mean, as I've been saying, this has been one of the strongest and most resilient markets of our lifetime because in the face of a global energy crisis, with interest rates pretty much going vertical on the 10-year and 30-year hitting levels we haven't seen in 19 years, and yet the market continues to make higher highs. And when you take a look fundamentally, I think that tells us two things. Number one is the underpinnings of the economy is stronger than many people think, and earnings. I mean, earnings growth has been tremendous, especially in the technology space. So, you know, this market structure has changed. Volatility happens so fast. We had names drop by 20% in 3 days at the beginning of last week.

[00:01:15]And they're right back teetering on new highs. So, I think investors have to be more nimble than ever. They have to pivot in the more concentrated areas if they want to achieve above-average returns. And lastly, I'll say is we do expect another correction in this summer.

[00:01:31]Energy costs are going to continue to stay high if there is no resolution in the Middle East, and that will be a headwind for the economy. But I think regardless of what happens short-term, these corrections should be bought if you have the right risk tolerance aggressively, cuz I think we're going to be much higher when we get to the December 31st of this year. Yeah, because you say despite these corrections that you're talking about, you say the market is expected to finish higher by year-end. So, how much of this AI productivity boom is already priced into that?

[00:02:00]I think we're just on the beginning of the productivity boom because we're just now starting to see small businesses. It is the talk in boardrooms. I have seen more I've had more conversations in the last 3 months than I've ever had in regards to the actual implementation of AI. So, this is just getting started. So, you're going to have two two types of companies out there. Those that implement AI for productivity and those that do not are going to become obsolete because that is the trend and the direction that we're going in. So, I think we're just in the beginning phase of the productivity boom. Now, again, there's still going to be corrections and violent moves in the markets, but the trend looks extremely strong and we're heading into a time period that frankly could get to much higher levels than many anticipate because there's still a tremendous amount of pessimism in this market. So, there's not that irrational exuberance you would expect to see when markets are at all-time highs. Yeah, it it is interesting to see that. When you talk about the correction you expect maybe halfway through the year, you say there's still some opportunities within that correction time period like kind of buying on the dips. Where would you be looking?

[00:03:09]So, I think you have to stick with the same themes. I think you need to buy a lot of folks are very underweight semiconductors because they've been afraid to buy it at high levels. I think you need to stay where the theme is right now, which is you want to own small caps. You want to own technology with a heavier weighting to the semiconductor space. And I think you can own emerging markets as well, too, because emerging markets when we finally get a peace deal at some point in time, I think the international markets could benefit even more than our domestic markets here in the US because they've been the ones hurt the most with this energy crisis.

[00:03:47]And so, this market that has continued to stay concentrated, I think it's going to stay concentrated this year because technology already had a pretty big correction that started last year and a lot of people are forgetting that. Uh and that was your opportunity to really gross up. So, any dips that you're going to get, I think you're going to see money flows go back in there because they're so underweight and have missed the V-bottom. Before we see dips though in a correction, I wonder if you expect markets to go even higher and if so, like what what is it that's going to take markets even higher than what we're seeing them at right now?

[00:04:22]You know, I think the biggest thing to watch right now, uh obviously I the Middle East peace deal will be a big thing, but to me the bigger thing is interest rates. If the 10-year note and 30-year note uh can just stop going up and just stay flat and trend down, I think you can see the market push to new highs going in the June.

[00:04:41]Uh but I would say as we start to get to mid-June, you know, if you've been overweight the right areas, it's probably going to be a time to maybe take some profits and see how we go into the summer cuz we do think we're going to see a summer correction. It's going to be healthy. I think it's going to get bought, um but it's a necessary thing to have when you're in a bullish trend. So, I think here short-term, we will make new highs, uh but we are getting to the latter innings as we head into the summer. You mentioned earnings the strong earnings report so far has helped to boost the markets up. So, I did want to ask you about earnings because I know US retailer earnings are coming out this week. There's a couple of big companies reporting. You've got Dick's, Gap, uh Costco, American Eagle. What are you expecting just within that sector when it comes to retail and what we might see this week?

[00:05:24]So, retail's been pretty weak and this is kind of a short-term warning sign uh that Walmart gave us. You know, Walmart to us has the best pulse on Middle America and they showed some concerns of spending by the consumer. So, this kind of ties in with our theme that we'll get a summer correction because I do think you're going to see these retailers start to warn of a summer slowdown due to the consumer not having extra income due to the price at the tank. So, this slow down economically that you could see will probably cause a scare in the markets, but there's a big difference between a slow down and a recession. And we do not think we're going to have a recession. So, this is why we would buy any fear that's caused from the retailers and other areas that are warning about a consumer that's still slowing their spending this summer. What about tech? I know we've been talking about tech quite a bit, but we've got Salesforce reporting this week. Dell, what are you watching for there?

[00:06:17]So again, we want to see guidance there and pricing power. Software has been an area that we have really been extremely underweight on because there's been a huge divergence. When you look at things like Salesforce, they have really struggled. Companies like Microsoft have struggled due to the fears that they're going to lose their pricing power as more and more companies adopt AI. So, we These are the things we want to see is what their margins look like and what their future guidance is. And most importantly, is how the market reacts.

[00:06:46]Because that tells us more than anything. You can think something fundamentally, but sometimes fundamentals aren't going to matter. The price action and what the stock market is telling you is where you want to be.

[00:06:57]And this is something I think investors are going to have to learn. Okay, Eddie Gabor, CEO of Key Advisors Wealth Management. Really appreciate your time today. Thanks for joining us. Thank you for having me.